Why is Macromedia's CEO unhappy?
He's righted his company and set the stage for a prosperous future. But that's not the way Rob Burgess likes it.
By Patrick Houston, ZDNN
October 8, 1999 10:06 AM PT
Rob Burgess has an odd affliction: He's not happy when things are going well.
He gets bored. If such is the case, he must be one unhappy CEO these days because things are going very well indeed at his company, Macromedia Inc. (Nasdaq:MACR).
Since taking the reins two years ago, the wiry 42-year-old Canadian has led the San Francisco-based maker of Web publishing software to an impressive comeback.
Now it's really on a roll. Just Wednesday, for example, it announced a $275 million acquisition, three key partnerships and a newly minted strategic e-commerce thrust. On top of that came yet another big endorsement from Wall Street. Volpe Brown Whelan rated Macromedia a strong buy and predicted that its stock, now nearing a 52-week high of $55, should be headed for $70 soon.
Burgess is predicting a gangbuster year, saying the company will outdo analyst's estimates for a 40 percent jump over last year's $150 million in revenues .
The company has been doing well enough, in fact, to have finally put to rest the characterization that has dogged it since 1996 when it lost $6 million on a nearly 10 percent drop in sales to $107 million. "Every article seemed to call us 'the struggling tools maker'," Burgess said. "That seems to be gone now."
Chop and refocus
To put that dubious distinction to rest, Burgess had to refocus Macromedia.
MACR (Nasdaq)
By 1996, the company had taken itself to a crest on the strength of two main products -- FreeHand, used by primarily by print publishing pros, and Director, used by CD-ROM developers. And its game plan was to provide similar authoring tools for nearly every part of media market, including video and 3D. Upon his arrival, Macromedia had no less than 10 different development projects underway.
Burgess cut seven of them, freeing up nearly half of the company's developers to concentrate on those that remained.
His next step was to target the Internet. He discerned a few key trends -- and bet on them. The foremost of these: Instead of plain-Jane pages that looked as though they were lifted off of paper, developers would begin producing sites with the multimedia flairs of sound, animation and interaction.
Macromedia generates more with Flash
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Now the company has five other Web authoring tools in its quiver -- all as part of its stated mission to bring the Web to life. Two of them have become bona fide hits. One is Flash for creating animations. The other is Shockwave for playing them. Burgess says that more than 140 million users have downloaded the plug-in for running Flash -- 20 million during September alone. Another 80 million now have Shockwave on their systems.
De facto standard
That's enough, Burgess says, to make Flash and Shockwave a de facto standard. Flash, in particular, is being showcased on an increasing number of high-profile sites, including Disney.com and Volkswagen.
With Macromedia righted, Burgess has been busy expanding its brief. This summer it made a consumer play by launching shockwave.com, an entertainment site that emerged out of the burgeoning user base for the player. Burgess says shockwave.com, which was established as a separate company, has already become the Web's third largest animation site and the fourth largest gaming one.
Now Burgess' is positioning the company to take advantage of the explosion in e-commerce. His latest strategic initiative served as a impetus for Macromedia's move on Wednesday to buy Andromedia, which creates traffic monitoring and personalization software, in a deal valued at around $275 million.
On the move
In making the announcement, Macromedia said the acquisition was part of a overall plan to become a leading provider of the e-commerce tools and unify the patchwork of software necessary to create an e-business. As part of these plans, Macromedia on Thursday also unveiled alliances with USWeb/CKS (Nasdaq:USWB), a San Francisco-based Web consulting and marketing services firm, and Broadvision (Nasdaq:BVSN), supplier of a comprehensive system used by Web sites to manage e-commerce.
If his company is on the move, so is Burgess -- literally. He recently relocated his office, from Macromedia's corporate headquarters to shockwave.com's digs next door. He was compelled to make the change, he says, because of that odd affliction. Things are ticking along quite well at Macromedia these days, thank you, and as Burgess himself puts it: "When things are working really well I'm not as interested."
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